Does Participation in Global Value Chains Reduce Spatial Inequalities within Countries?
This paper examines whether a country’s participation in global value chains supports spatial convergence in the domestic economy. In theory, production disintegration through “unbundling” makes industrial development less lumpy, providing opportun...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/172431618022755760/Does-Participation-in-Global-Value-Chains-Reduce-Spatial-Inequalities-within-Countries http://hdl.handle.net/10986/35441 |
| Summary: | This paper examines whether a country’s
participation in global value chains supports spatial
convergence in the domestic economy. In theory, production
disintegration through “unbundling” makes industrial
development less lumpy, providing opportunities for smaller
cities to plug and play in niche spaces while not having to
fight the agglomeration economies offered by large
metropolitan areas. Using data on the size distribution of
cities within countries and the Organisation for Economic
Co-operation and Development’s Trade in Value Added
database, the paper finds that integration in global value
chains is strongly associated with greater concentration in
large urban agglomerations, not less. A unit standard
deviation increase in domestic value added in exports of
intermediate products is associated with a decline of 0.1
standard deviation in the Zipf coefficient, an index
measuring spatial dispersion. Spatial concentration is
strongest for global value chains involving
knowledge-intensive business services and high-technology manufacturing. |
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